{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 5 questions Student Version

# Chapter 5 questions Student Version - Question 1 Espresso...

This preview shows pages 1–6. Sign up to view the full content.

Question # 1 Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is \$1,200 and the variable cost per cup of coffee served is \$0.22. Required: 1. Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent. Cups of Coffee Served in a Week Fixed cost ......................... 2,000 ? 2,100 2,200 ? ? Variable cost ? ? ? Total cost ......................... ? ? ? Cost per cup of coffee served ? ? ? 2. Does the cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Explain.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Question # 2 The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month Occupancy-Days Electrical Costs January ................ 1,736 \$ 4,127 February ............... 1,904 4,207 March ................. 2,356 5,083 April .................. 960 2,857 May ................... 360 1,871 June .................. 744 2,696 July ................... 2,108 4,670 August ................ 2,406 5,148 September ............. 840 2,691 October ............... 124 1,588 November .............. 720 2,454 December .............. 1,364 3,529 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent. 2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month?
Question # 3 The Lakeshore Hotel's guest-days of occupancy and custodial supplies expense over the last seven months were: Month March ............ Guest-Days of Occupancy 4,000 Custodial Supplies \$7,500 Expense April .......... ......... 6,500 \$8,250 May ............. ......... 8,000 \$10,500 June ............. ......... 10,500 \$12,000 July .............. ......... 12,000 \$13,500 August ........... ......... 9,000 \$10,750 September ........ ......... 7,500 \$9,750 Guest-days is a measure of the overall activity at the hotel. For example, a guest who stays at the hotel for three days is counted as three guest-days. Required: 1- Using the high – low method, estimates a cost formula for custodial supplies expense. 2- Using cost formula you derived above , what amount of custodial supplies expense would you expect to be incurred at an occupancy level of 11,000 guest –days?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Question # 4 Harris Company manufactures and sells a single product. A partially completed schedule of the company's total and per unit costs over the relevant range of 30,000 to 50,000 units produced and sold annually is given below: Unit Produced and sold Total Cost Variable Cost Fixed Cost Total Cost Current Cost Variable Cost Fixed Cost \$180,000 300,000 \$ 480,000 ======= ? ? ? ? ? ? ? ? ? ? 1. Complete the schedule of the company's total and unit costs above. 2. Assume that the company produces and sells 45,000 units during the year at a selling price of \$16 per unit. Prepare a contribution format income statement for the year.
Question # 5 Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The sounding bars are cast from brass and hand-filed to attain just the right sound.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 15

Chapter 5 questions Student Version - Question 1 Espresso...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online